Q&A: David Rennick – "You have a choice to be a positive influence, or a negative influence, so why not be positive"

In this Q&A, Pinsent Masons’ Head of Australia David Rennick discusses the excitement of setting up a new firm in Australia; why he made the tough call to leave Maddocks; and plans for the future.

Launching Pinsent Masons here about 18 months ago, you said there was as “an opportunity to bring a new kind of law firm to the Australian market” while taking advantage of the strength of your British headquarters. How did you go about creating this firm?

“We started off with a clean sheet of paper and said to ourselves ‘how would we design a law firm of the future?’ – not one based on the past. Rather than just import a UK-headquartered law firm into Australia, as a lot of others have done, we said ‘let’s look at everything we do’ – how we structure ourselves, how we organise ourselves, how we employ people, how we use technology – all of those things.”

What do you see as the key components of the model?

“We looked at each individual and asked what arrangements would suit them. We wanted to tailor arrangements to each person based on what would suit the business. Law firms have traditionally been run on the basis that you should have everyone working full-time and you need a pool of people who are available 100 per cent of the time – and that’s an expensive model in which you entrench fixed costs. What we did is create a far more variable cost base so that we have a key pool of people and then we bring others in on different bases as and when we need them.

“The benefit to the client is that they’re not paying for those fixed overheads. We’re able to be a lot more flexible and creative with our pricing for clients. That translates to a whole range of costs. With premises we don’t need a desk for every person; we are running a different premises model where we have about 500sqm in each of Sydney and Melbourne. We’ve got enough desks for about 75 people, but the idea is that our offices will be a base for more than 100 people. So we’ve got people on the road all the time with clients, working from home and in a variety of ways. That’s working really well.”

How do you manage recruitment in such a flexible environment?

“We’ve deliberately recruited people who like the flexibility, who like to be able to work from home. They’re happy to work in an airport lounge. They’re excited by the international aspect of Pinsent Masons. Now, that’s not for everybody, which is fine, but it is important that for everybody that we have in this business that it’s exciting for them. We don’t have people shackled to their desks. We’re encouraging people to focus on their outputs rather than their inputs.”

What happens if a top-class lawyer is in line to join your firm, but they are somewhat old school?

“The story I like to tell about that stems from the early days of the firm. We targeted a tremendous lawyer and I got very excited about this person. Going through the interview I was thinking this person is really perfect for us. Then I started discussing our whole agility model – working open plan, working away from the office, and I could see this cloud go across his eyes and I knew this person was not right for us. He’s a tremendous person and absolutely perfect in almost every respect. But we’ve got to have people whose eyes light up when you start talking about the law firms of the future.”

With such a teleworking focus, how important is technology?

“It’s very important and it hasn’t been without its frustrations. We started off with a fully agile IT solution for all employees and we were very aggressive about that early on. Most of the time that works very well, but regrettably, when some of it doesn’t work, that’s not good. We have now supplemented the fully agile model with some more fixed technology features to give us greater resilience. For example, some of our administrative staff didn’t need the technology tools as much as the lawyers needed them. One of the learnings is that we tried to initially go with an IT consultancy model with people coming in to help us. That didn’t work for us and we now have a full-time IT person. The other lesson is that you can’t scrimp on IT. Every time we tried to save money it didn’t work.”

What are some tools that have helped Pinsent Masons?

“We have a matter-management system called Term Frame, which uses artificial intelligence and it helps our lawyers provide more consistent, accurate and quicker outcomes. That’s saving us thousands of hours of work. We’ve got quite a bit on the cloud, but there are security issues. Being an international business, it’s even more important because you’ve got so many regulatory issues to deal with. The sheer volume of security issues means that a lot of the cloud stuff is not suitable. To offset this, the firm has developed Cerico, a technology-driven solution that automates many of the compliance processes that businesses need as a result of legislation. It’s very sophisticated.”

Before Pinsent Masons, you had a long stint at Maddocks. How tough was it to depart?

“It was incredibly hard to leave. I had 20 very happy years there, including the last six as chief executive officer. It’s a very successful firm and I have a lot of friends there. But after being CEO for six years, I promised myself that I wouldn’t go any longer than that, although I was tempted to. When Pinsent Masons approached me to help them set up in Australia, I knew that you only get that chance once in your career if you are incredibly lucky. So I decided to jump.

“It’s a very different job. Starting from scratch, you’re doing everything. The development part of the business is something I really love – fostering new clients and recruiting new talent and doing the people stuff. So I have no regrets. It’s been incredibly exciting. After 18 months, we now have 45 people and we are really busy and doing much better than we expected at this point. What I’ve enjoyed most about the role is that we have a very clear strategy – we are focused on infrastructure, we have a business which is extremely well connected into the Asia-Pacific region and that’s very interesting from a business and legal point of view. I now sit on the international board and work across all the firm’s jurisdictions. I’m thoroughly enjoying it.”

Are you able to run your own show?

“Yes, we can. That was an important part of the decision-making process when joining the firm. You hear stories about other firms where you can’t make decisions on fairly minor matters unless you get approval from Chicago or London or somewhere. That’s not the case here. We have the ability to hire people to essentially run our own show, but the important caveat to that is that it has to be done on the basis of the international business model. Fundamentally we can run the operation here and, provided we don’t step out of line, that’s okay.”

Does the rise of international firms in Australia represent a threat to the national firms?

“I’ve never been one for doom and gloom for national firms. But what it has done and will continue to do is change the shape of the legal industry across the world. You’ll have very good international firms and you’ll have very good national and regional firms. The challenge for any firm is to decide ‘what are we famous for’ and ‘what are our differentiators?’ Those firms that do not differentiate will struggle.”

What makes a good law firm leader?

“There is a book in that question! To encapsulate it, leaders have to be natural and genuine and not fake it. People can pick a fake pretty easily. Good leaders have got to really love dealing with people and enjoy seeing people develop; often to be more successful than themselves.

“There are a couple of keys with any business. You’ve got to have a range of leaders in the business with the capacity to communicate a picture of the future and make that something people believe in and want to be part of. Our Senior Partner Richard Foley is a truly superb leader, particularly in terms of his communication skills. He can paint a picture and then help people understand their role to achieve those objectives. You’ve got to have boundless energy and enthusiasm – and you can’t have a bad day. You’ve got to make sure that you’re always setting a positive example. You have a choice to be a positive influence or a negative influence, so why not be positive.

“The final thing I would say is that a leader is only good as the other key people they have around them and being able to get, pick and develop and work with your key team is absolutely critical. They’re the ones who make you look good. I’m not just talking about the partners here; I’m talking about people in business operations. If you get the right people in the right positions, it makes life a lot easier.”

There has been speculation that Pinsent Masons’ Australian firm could seek out mergers or acquisitions. What does the future hold?

“Everything is on the table. We think there is significant growth available to us in the infrastructure sector. But we are not fixated on growth for growth’s sake. We don’t have designs on being the largest firm in Australia, or the world, or any other jurisdiction. What we are on about is being the market leader in our global sectors.

“So the question we ask ourselves is ‘what do we need to do that?’ We think we need to grow; we are still subscale in that respect. We have tremendous people, but there’s a whole lot of opportunities we could take if we had more people. So we will be aggressively growing in the next couple of years and we will be open-minded as to how we do that – whether it’s by way of acquisition, lateral recruitment, internal growth, or all of the above. If a merger presented itself either here or in the Asia-Pacific, we would also look at that.”